Wind Energy Market and Industry

Market Opportunities
  • Saturated markets like Germany will see a lot of activity in re-powering sites that are coming to the end of their first lease.
  • The biggest market with agressive growth is China.
  • In Europe, the biggest opportunity is offshore in the North Sea, especially in the UK, as the UK market is not saturated. By April 2010, the UK has reached 1GW off-shore capacity with a further 4GW already approved, and potential for another 40GW
  • Latin American countries Chile, Peru and Brazil
Technology Opportunities
  • Unlike in solar, device efficiency has not improved much in the past years. Rotor efficiency is not driving costs in wind energy.
  • Technological advances will be evolutionarily driven by the size of the turbine and off-shore with pressure on material (weight, strength and cost) and operations & maintenance costs.

 

 

 

Wind Energy Market 2009 - 2011

The countries with the largest cumulative wind energy capacity are China, USA, Germany and India. Early adopters of wind energy like Denmark, Germany and Spain have moved into lower growth (less than 10% p.a.) since 2008. In Germany, the on-shore market is almost at saturation, and most of the future action will be in re-tooling end-of-life wind parks. Like the UK, Germany is building off-shore capacity, but most of that is not yet connected. In Europe, the UK, Turkey, Poland and Sweden have seen much higerh growth, albeith from a much lower base than Germany or Spain.

Otherwise, high growth markets have moved to China and South America, especially Brazil, Mexico, Chile and Argentina.

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(based on data from European Wind Energy Association)

Demand for wind energy - new installations 2009 - 2011

Global capacity added annually during 2009-2011 has only increased from 37GW (2009) to 41GW (2011). Much more interesting, however, is the geographic shift of growth away from the USA and Europe to Asia and South America.

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The Top-20 countries in wind energy 2011

Since 2011, China is outstripping all other markets by a significant margin, commanding more than a third of the world market. The top-5 countries, China, USA, India, Germany and the UK account for more than 75% of the global demand. It is still concentrated on a few countries, though many more countries now boast new installations.

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The Wind Energy Industry

The demand for wind energy converters (WECs) is met by a highly competitive industry. There is no oligopoly that is so prevalent in solar polysilicon production. Instead, no company has more than 20% market share. The largest manufacturers are Vestas and GE Energy.

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There are a distinct regional flavours to this picture: For instance, the German market is dominated by Enercon with a market share of 60%. Enercon may find it difficult to maintain its global market share if the market in Germany slows down. Similar GE Energy has a dominant position in the U.S. and Gamesa in Spain. With ever larger models, however, capital requirements increase, favouring larger companies. We predict therefore some M&A activities in the future.

Cost Structure

Cost Structure of Wind FarmsNot surprisingly, the turbine itself accounts for most of the costs of an installation. However, costs for cabling to the transformer, grid connection, foundation and roads can be significant.

Project development includes in-depth wind studies, permitting, but may also include noise studies and other nevironmental assessments.

Altogether, wind turbines come to around €1,600 per installed kW of rated power.

In offshore installations, the foundation has a much larger share in the total.

 

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